Gold and Concrete Gold: When Asset Values and Share Prices Diverge – Lahontan Gold, Vonovia and LEG Immobilien Under the Microscope

Lahontan Gold: Enormous valuation gap

At Lahontan Gold, the focus is the restart of the former Santa Fe mine in Nevada. With the recently published preliminary economic assessment (PEA), the Canadian company has reached an important milestone on the road to production.

The PEA puts the project's after-tax net present value at USD 820 million. This is based on assumed prices of USD 3,600 per ounce of gold and USD 49 per ounce of silver. Over 11 years of operation, the model envisages average annual production of around 92,000 ounces of gold equivalent, with costs per ounce (AISC) estimated at USD 2,250. Lahontan expects the necessary construction permits in 2027. Starting production in the same year therefore remains an ambitious corporate target.

The stock market initially reacted to the latest announcement with share price declines. Had the market expected too much? Uncertainty over project financing and forthcoming dilutive capital increases often plays a role. With targeted equity at just 20% of the total investment of around USD 170 million, dilution should be comparatively moderate. According to the company, discussions with several potential debt financing partners have been ongoing for some time.

The acquisition of Emergent Metals agreed in September offers additional prospects. On completion, Lahontan is expected, among other things, to gain full control of the promising West Santa Fe area, eliminate certain royalties and acquire the adjacent New York Canyon project. The consideration will be paid mainly in shares, with existing Emergent shareholders expected to hold around 4.7% afterwards.

Vonovia: Down 30% since the start of the year

With ownership of around 528,000 apartments in Germany, Sweden and Austria, Vonovia is one of the industry's major players. Rents form the core of revenue; services, energy supply, sales and project development round out the profile. In the first half, adjusted EBITDA rose slightly by 2.4% to EUR 1.46 billion. Adjusted pre-tax earnings, by contrast, fell 2.6% to EUR 962 million.

The share trades at a substantial discount to the EPRA NTA metric, which the industry frequently uses. EPRA NTA describes net tangible assets adjusted in accordance with industry rules. A half-year EPRA NTA of EUR 46.22, compared with the current share price, shows a discount of over 60%.

Rising interest rates, economic concerns and the political debate over housing expropriations in Berlin are weighing on the stock. The share has fallen about 30% since the start of the year. Analysts see a buying opportunity at the reduced level. On average, the experts see upside potential of over 40% over the next 12 months. The company will present its next quarterly results on November 4.

LEG Immobilien: New major shareholder

LEG focuses on affordable housing, primarily in North Rhine-Westphalia, Germany's most populous federal state. In the first half, like-for-like rents rose 3.7%, while the corresponding vacancy rate fell to 2.3%. However, AFFO, an operating earnings metric adjusted for capital expenditure, fell from EUR 126.6 million to EUR 110.5 million. The company attributed this to higher or earlier capital expenditure. For 2026, LEG confirmed an AFFO target of EUR 220 to 240 million.

At LEG, too, the asset value metric and share price diverge. With EPRA NTA of EUR 139.04 per share at the end of June and a current share price of around EUR 48, the calculated discount is around 66%. Grand City Properties' recently announced 20% stake in LEG attracts attention and provides a valuation benchmark. Grand City Properties classifies its stake in LEG, valued at almost EUR 4 billion, as a financial investment. Analysts see around 40% upside over the next 12 months for the high-dividend stock, which offers an annual payout of over 6%.

Conclusion

Lahontan's transition to a gold producer should gradually also lead to higher share prices. The project value is more than 8 times higher than the current market capitalisation. Vonovia has a broad rental business but cannot insulate itself from the challenging industry environment. By taking a stake in LEG, Grand City Properties is setting a valuation benchmark that highlights the share's undervaluation.